OREANDA-NEWS. “New capital requirements have obliged all banks to review and revise their lending. In spite of this, the first half of the year saw acceleration in corporate lending volumes. Investment growth has recovered and industrial production is growing at a much faster pace YoY. Increasing wages and household expectations suggest that domestic demand is going to pick up in the second half of this year and may become the main driver of growth“, said Marius Adomavicius, Head of Swedbank Lithuania.

Swedbank Lithuania reported a net profit of LTL 188m in H1 2013, up 8 per cent on H1 2012. However, when the LTL 33m profit from the sale of Swedbank Life Insurance shares to Swedbank Estonia is excluded, the net profit in H1 2013 amounted to LTL 155m - 11 per cent down on H1 2012.

Loans and deposits

Lending volumes in H1 2013 grew by 4 per cent YoY. The loan portfolio amounted to LTL 14.3bn at the end of Q2 2013. The increase is mainly attributable to the corporate segment. The first signs of improvement in new household lending volumes were evident in the second half of H1.

Total deposit volumes increased by 6 per cent in H1 2013 YoY. The deposit portfolio amounted to LTL 14.5bn at the end of Q2 2013. The increase was in both corporate and private deposits. The loan-to-deposit ratio decreased to 99 per cent (100 per cent - Q2 2012).

Credit quality

Net recoveries amounted to LTL 17m in H1 2013 (LTL 5m - H1 2012). Impaired loans continued to decrease during H1 and amounted to LTL 0.7bn at the end of Q2 2013. The improvement in credit quality was mainly due to a corresponding improvement in client security.

Revenues and costs

Total income for H1 2013 reached LTL 309m - a YoY decrease of 6 per cent.

Net interest income fell by 9 per cent year on year. Total net interest income amounted to LTL 162m in H1 2013. The decrease was mainly due to low market rates.

Net commission income increased by 4 per cent year on year and amounted to LTL 111m in total at the end of H1 2013. The increase was mainly driven by an increase in daily banking activity and growth in client numbers. The number of active customers increased by 41 949 YoY in H1 2013, reaching a total of 1 423 680.

Expenses grew 2 per cent (LTL 2m) YoY and reached LTL 156m in H1 2013. The cost/income ratio stood at 50 per cent (47 per cent in H1 2012). In order to increase efficiencies, a new Baltic Banking operating model has been set up and will be launched in 2013. The new model will improve collaboration across the Baltic region.